Cryptopia has announced that it is relaunching the New Zealand Dollar stablecoin (NZDT) in Q1 2019. The exchange has a daily trading volume in excess of USD 2 million and has been a hub of altcoin trading and mining activity since it launched in 2014.
The NZDT was originally launched in 2017, with daily trading volume rallying to NZD 1 million per day. This spooked ASB, the bank that Cryptopia was working with, since proper know your customer (KYC) and anti-money laundering (AML) laws were not in place. Fortunately, the orderly termination of the NZDT stablecoin gave customers a month to convert their NZDT back to NZD.
Apparently, Cryptopia has now secured a bank account with an undisclosed bank and is in talks with government regulators to make sure the NZDT is not abruptly terminated again. Regulators are reportedly favorable towards the stablecoin.
It is difficult for New Zealander cryptocurrency traders to enter the crypto space. Fees are high and it takes days to deposit NZD into an offshore exchange. Campbell Pentney from the Bell Gully law firm said, “Let’s assume blockchain takes off and has amazing projects all over the world. Without an NZ dollar entry point, New Zealanders will find it hard to invest in these projects directly. Because getting money from your bank here into one of these cross-border exchanges takes days and involves big fees.”
This is why the NZDT became so popular. The process is relatively quick and the fees are lower than when sending fiat to an offshore exchange. The NZDT allows New Zealanders to buy cryptocurrency worldwide on any exchange that integrates the wallet.
Pentney said, “Not having them [a New Zealand Dollar stablecoin] matters hugely. It was going great guns, growing massively fast, and then suddenly there was no banking access. People are saying: ‘how do I buy Bitcoin?’”
Currently, there are only a few cryptocurrency exchanges in New Zealand that accept NZD deposits directly but their volumes are low and the lack of liquidity is not optimal for trading.
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